America Looks Like It’s Headed for a ‘Restaurant Recession’

Restaurant goers look on as protesters march near the RNC Convention in Cleveland on July 18, 2016. Photograph by Justin Sullivan — Getty Images

It seems like no one wants to eat out when the world is in chaos, and one analyst says the U.S. is headed for a “restaurant recession.”

After downgrading 11 restaurant stocks on Tuesday, Stifel, Nicolaus & Co. analyst Paul Westra predicted a major downtown will soon hit, fueled by “U.S. politics, terrorism, social unrest,” and a resulting economic uncertainty, which is usually a sign of worse things to come.

“We warn investors that restaurant-industry sales tend to be the ‘Canary that Lays the Recessionary Egg,'” he wrote in a report.

Jefferies Analyst Andy Barish also foreshadowed a bear market for the struggling industry, predicting at least 18 months of low sales and high labor costs, according to MarketWatch.

Fast-food traffic dropped 1.3% in June for its third straight month of declines according to the latest industry report from MillerPulse in partnership with Nation’s Restaurant News. Casual dining fell 2.5%, which was its worst traffic number since February 2014.

“When sales and traffic are weakening, it’s hard to see the bright side,” the report said.

The grim restaurant numbers provide a stark contrast to the nation’s overall economic performance. By most measures, the U.S. economy is steady, if not booming, with job growth surging in June.